Wednesday, February 05, 2003

Remora

Cupidity on a scale unexampled...

Last week, with little fanfare, FERC released information conclusively showing that Reliant closed down electric generating plants in order to create artificial energy shortages, and thus raise prices, in California in the great energy heist of 2000.

Jason Leonard of Counterpunch has a nice, detailed article about this. Here's the smoking gun graf -- of course. You can't have a scandal without a smoking gun, anymore:

"This latest smoking gun in the ongoing investigation into California's energy crisis, a transcript of a conversation between a trader and a power plant operator at Houston-based Reliant Energy in which the two discuss shutting down some of the company's power plants in California between June 20 and 22, 2000 to create an artificial shortage so the price of power would skyrocket, was released by the FERC Friday. The tactic worked. It caused power prices to reach "unjust and unreasonable" levels in California, which under the Federal Power Act is illegal.

We "started out Monday losing $3 million... So, then we decided as a group that we were going to make it back up, so we turned like about almost every power plant off. It worked. Prices went back up. Made back about $4 million, actually more than that, $5 million," the Reliant trader says in a tape-recorded conversation on June 23, 2000.

As we pointed out yesterday, Adam Smith shrewdly advanced the proposition that a government of traders is a government with an incentive to work against the interests of the governed. This plays itself out in the punishment of Reliant the fine against them, as Leonard puts it (reaching for the cliche) is a slap on the wrist.

"Reliant cut a deal with FERC, agreeing to refund California $13.8 million to settle the issue and will not be penalized under federal laws."

Our point, yesterday, was that while the United States itself might not have a primary interest in spending 100 billion dollars to accrue the oilfields and reserves of Iraq, its actions could well be drvien by the mindset of oilmen who arise from a culture in which that interest is lively. As we know, the foundation of Bush's personal fortune was laid in Bahrain, the small Gulf principality with which Harken cut a suspiciously profitable deal in 1990. To say this is not to say that the Blood for Oil equation is a sufficient account of the Iraq crisis -- really, there are other factors here than the culture from which Cheney and Bush have sprung -- but it is to say that there exists a bias here critically skewing the way this administration is moving towards war. This war resembles, in its causes, the Boer War, which was also driven by a combination of greed and jingoism. The greed part of the equation is continuous between domestic and foreign policy, and has a similar form: the sinister contiguity of the Bush "emergency energy policy," designed by the lugubrious Cheney in secret council with his energy pals, and the brownouts in California, is reproduced in the plan to target Iraq, which we've been assured was initiated in the aftermath of 9/11 even though there was no link between Iraq and 9/11 -- or, at least, less of a link than between, say, Saudi Arabia and 9/11. Again, we have Cheney as the hawk, again we have distorted information driving the operation, again we have a president reluctantly taking action he manifestly wants to take.

I'm listening to Powell give his speech to the U.N., and I'm amazed by the quality of it. That Powell denounces Iraq for chemical warfare that the U.S. tacitly condoned, and that Western companies, in the eighties, profited from is deeply cynical move. And I'm thinking of the last paragraph of this story about the timing of the war in the NYT:

"Waiting months, however, seems unlikely, and from a strictly military standpoint inadvisable. The Bush administration has yet to lay out all of the evidence about Iraq's weapons programs or its links to terrorists but it has already laid the groundwork for an early war. The military preparations have a momentum and dynamic of their own. The administration will not want to keep the military in idle for long so the diplomats will also not have long. The forces are getting in place. The gun is cocked. Nobody can tell the future, but the forecast is for war."

About Me

MANY YEARS LATER as he faced the firing squad, Roger Gathman was to remember that distant afternoon when his father took him to discover
ice. Or rather, to discover the profit making potential of selling bags of ice to picnicking Atlantans, the most glorious of the old man's Get Rich schemes, the one that devoured the most energy, the one that seemed so rational for a time, the one that, like all the others - the farm, the housebuilding business, the plastic sign business, chimney cleaning, well drilling, candy machine renting - was drawn by an inexorable black hole that opened up between skill and lack of business sense, imagination and macro-economics, to blow a huge hole in the family savings account. But before discovering the ice machine at 12, Roger had discovered many other things - for instance, he had a distinct memory of learning how to tie his shoes. It was in the big colonial, a house in the Syracuse metro area that had been built to sell and that stubbornly wouldn't - hence, the family had moved into it. He remembered bending over the shoes, he remembered that clumsy feeling in his hands - clumsiness, for the first time, had a habitation, it was made up of this obscure machine, the shoe, and it presaged a lifetime of struggle with machine after machine.